Hooker v. The Citadel Salisbury LLC
| Docket Number | 1:21-cv-00384 |
| Decision Date | 25 May 2022 |
| Parties | SONYA HOOKER, SYBIL RUMMAGE, DONNA DEAL, KENNETH MICHAEL DEAL, and BETTY DEAL, individually and on behalf of a class of those similarly situated, Plaintiffs, v. THE CITADEL SALISBURY LLC, SALISBURY TWO NC PROPCO LLC, ACCORDIUS HEALTH LLC, THE PORTOPICCOLO GROUP, LLC, SIMCHA HYMAN, and NAFTALI ZANZIPER, Defendants. |
| Court | U.S. District Court — Middle District of North Carolina |
This class action lawsuit seeks economic and emotional distress damages arising out of alleged nursing home understaffing prior to and through the COVID-19 pandemic. Plaintiffs are residents of The Citadel Salisbury nursing home: Sybil Rummage, along with her sponsor, Sonya Hooker; and Betty Deal, along with her sponsors Donna Deal and Kenneth Michael Deal. Defendants, The Citadel Salisbury, LLC (“The Citadel”); Salisbury Two NC Propco, LLC; Accordius Health, LLC (“Accordius”); The Portopiccolo Group, LLC (“Portopiccolo”); Simcha Hyman; and Naftali Zanziper, move to dismiss (Doc. 24), or alternatively, to stay (Doc. 26) the action and to strike portions of the complaint (Doc. 28). Plaintiffs have responded, opposing the motions (Docs. 30, 31, 32), and Defendants have filed replies (Docs. 33, 34, 35).
Fifteen days after Defendants filed their reply brief in support of their motion to dismiss, Plaintiffs moved to amend the complaint to, among other things, add multiple parties and claims, withdraw one claim, and augment certain allegations. (Doc. 36.) Plaintiffs have responded, opposing the motion (Doc. 39), and Defendants have replied (Doc. 43).
For the reasons set forth below, the motion to dismiss will be granted in part and denied in part, Defendants' motion to stay and motion to strike will be denied as moot, and Plaintiffs' motion to amend will be granted in part and denied in part.
The basic facts alleged, as relevant to the motions before the court and taken in the light most favorable to Plaintiffs are as follows:
Plaintiffs Sybil Rummage and Betty Deal (“Resident Plaintiffs”) are residents of a nursing home facility located at 710 Julian Road. (Doc. 1 ¶¶ 7, 10-11.) When each Plaintiff entered the facility prior to 2020, it was known as “Salisbury Center” and was owned and operated by Genesis Healthcare (“Genesis”). (Id. ¶ 31.) When they arrived at Salisbury Center, Resident Plaintiffs executed admission agreements outlining the care and basic services they should expect to receive. (Id. ¶ 60.) Plaintiffs Sonya Hooker, Donna Deal, and Kenneth Michael Deal (“Sponsor Plaintiffs”) are family members who sponsor and assist the Resident Plaintiffs. (Id. ¶¶ 6, 8-9.)
On February 1, 2020, Salisbury Center was sold, and operational control was transferred to The Citadel. (Id. ¶ 26.) The services and care at Salisbury Center had deteriorated as Genesis fought financial trouble (id. ¶ 32), and conditions grew worse once The Citadel took over (id. ¶ 37). Residents experienced various problems from alleged chronic understaffing as part of the Defendants' business model, such as failures to provide necessary medication and care to the residents and to adequately communicate with sponsors. (Id. ¶¶ 75-77, 121, 123, 144-148, 240.) Plaintiffs suffered general emotional distress because of these failures. (Id. ¶¶ 121, 125, 161, 174.) According to the Centers for Medicare and Medicaid Services (“CMS”), during the time of The Citadel's ownership, the quality rating of the facility declined from one to zero out of five stars. (Id. ¶ 43.) The Citadel was eventually “subject to more frequent inspections, escalating penalties, and potential termination from Medicare and Medicaid” as part of the state's “Special Focus Facility” program for nursing home facilities with a “history of serious quality issues.” (Id. ¶ 41.)
The Citadel is a limited liability company organized under North Carolina law and holds a license with the State of North Carolina, Department of Health and Human Services, Division of Health Services Regulation, to operate as a for-profit combination skilled nursing facility and adult care home. (Id. ¶ 11.) Defendant Salisbury Two NC Propco, LLC is a limited liability company organized under North Carolina law and owns the property where the facility is operated. (Id. ¶ 13.) Defendant Accordius is a limited liability company organized under the laws of the State of New York and provides “management” services to The Citadel. (Id. ¶¶ 14-15.) Portopiccolo is a limited liability company organized under New Jersey law and provides “back office services” to The Citadel. (Id. ¶¶ 16-17.) The sole members and owners of all limited liability companies involved are Simcha Hyman and Naftali Zanziper. (Id. ¶¶ 18-20.)
Beginning when The Citadel assumed operations, Plaintiffs allege, The Citadel was purposefully and consistently staffed inadequately such that it was unable to provide the services required for the safety and well-being of its residents. (Id. ¶ 58.) Plaintiffs' original complaint brings four claims for relief: (1) breach of contract, (2) violation of the North Carolina Unfair Trade Practices Act (“UDTPA”), N.C. Gen. Stat. § 71-1.1., (3) breach of fiduciary duty, and (4) negligent infliction of emotional distress (“NIED”). (Id. ¶¶ 207-253.) The proposed amended complaint seeks to withdraw the breach of fiduciary duty claim, add a negligence claim, and add several parties and other Defendant-related facilities. Plaintiffs seek damages reflecting payments they made and disgorgement of Medicare or Medicaid payments made on their behalf “reflecting the reasonable value of the staffing hours they were entitled to have receive and did not receive.” (Doc. 1 ¶ 2.) Plaintiffs allege class action treatment, citing “hundreds” of plaintiffs and 15 common questions that include the following: the use of “uniform policies and systems” of management; allegedly deceptive advertising and statements; “[w]hether the law requires the facility to maintain staffing at a reasonable across-the-board level” which is alleged to be 4.1 hours per resident day of “total nurse staffing” and 0.75 hours per resident day of “Registered Nurse staffing”; and damages. (Id. ¶ 202.)
Defendants moved to dismiss the complaint, or in the alternative to stay, and to strike certain allegations of the complaint. Plaintiffs responded with oppositions and filed a motion to file an amended complaint that purports to shore up deficiencies of the original complaint and to expand this action. Defendants oppose any further amendment.
All motions are fully briefed and ready for consideration.
Plaintiffs' motion to amend, filed on the heels of the briefing of Defendants' motion to dismiss, seeks to amend the complaint to (1) add Ms. Kilgo and her sponsor and adult daughter, Ms. Lee, as Plaintiffs; (2) join Myers Park and Myers Park Propco, LLC, as Defendants; (3) “provide greater factual and legal support” that all defendants “should be held jointly and severally liable due to their direct involvement on the facts”; (4) expand the proposed class to all thirty-seven facilities owned and operated by Hyman and Zanziper; (5) add claims for negligence and equitable relief; and (6) withdraw their fiduciary duty claim.[1] (Doc. 36.) Plaintiffs argue the motion to amend should be granted because it “is made in good faith, will assist in ensuring litigation of the material issues, and is neither frivolous nor will cause any material prejudice.”[2] (Doc. 37.) Defendants argue the motion should be denied because it is futile, in bad faith, and unduly prejudicial. (Doc. 39.)
Where a complaint is properly amended, it supersedes the prior complaint and becomes the operative pleading. Fawzy v. Wauquiez Boats SNC, 873 F.3d 451, 455 (4th Cir. 2017) . But where a plaintiff moves to amend a complaint in response to a motion to dismiss, the motion to amend has the potential to either frustrate or moot the resolution of the pending motion to dismiss. The court therefore must exercise some level of discretion in deciding which motions to resolve. Because these two motions are fully briefed and share the same standard of review in part, the court will consider all motions and will not deem the motion to dismiss mooted by the requested amendment.
Pursuant to Federal Rule of Civil Procedure 15(a)(1)(B), a plaintiff may amend the complaint once as a matter of course within 21 days after the earlier of (1) service of a responsive pleading or (2) service of a motion under Rule 12(b), (e), or (f). After that period, a party may amend only with either the opposing party's written consent or the court's leave. Fed.R.Civ.P. 15(a)(2). The court therefore has the discretion to entertain the pending motion to dismiss, or to consider the motion to amend and then permit the parties to re-brief the motion to dismiss. Foman v. Davis, 371 U.S. 178, 182 (1962) (). And while district courts have discretion to grant or deny a motion to amend, the Fourth Circuit has interpreted Rule 15(a) to provide that “leave to amend a pleading should be denied only when the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the amendment would have been futile.” Laber v. Harvey, 438 F.3d 404, 426 (4th Cir. 2006) (citation omitted); Foman, 371 U.S. at 182 (same).
“[I]f the proposed change advances a claim or defense...
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